Market breadth is a means of measuring the strength of a trend in a securities market. Market breadth studies include: advancing vs. declining securities; up volume vs. down volume; new highs vs. new lows; number of stocks trading above or below a moving average; etc., in the market or index that is being studied. Market breadth indicators are sometimes referred to as internal market indicators, or market internals, as they are used to aggregate information about what is happening to all of the securities in a group that is being studied at a given point in time.
Number of buyers and sellers actually participating in the up and down price movement of a particular item or the entire market.
the fraction of the overall market that is participating in the market’s up or down move. Looking at this parameter allows investors to reduce the impact of the large cap stocks which influence market indices the most, and instead examine price trends of a diverse range of stocks. This parameter is important in the context of technical analysis, as a measure of market sentiment. Market breadth is also used to refer to the number of independently issued price forecasts for a certain number of stocks (less common). also called breadth.
A technique used in technical analysis that attempts to gauge the direction of the overall market by analyzing the number of companies advancing relative to the number declining. Positive market breadth occurs when more companies are moving higher than are moving lower, and it is used to suggest that the bulls are in control of the momentum. Conversely, a disproportional number of declining securities is used to confirm bearish momentum.
The breadth of market indicator is used to gauge the number of stocks advancing and declining for the day. If the breadth indicator is strong, this theory predicts that the market will be rising and vice versa.